(ICON)
Prudential
Global
Genesis
Fund, Inc.
SEMI
ANNUAL
REPORT
Nov. 30, 1996
(LOGO)
<PAGE>
Prudential Global Genesis Fund, Inc.
Performance At A Glance.
It was a lackluster six months for small companies around
the world. Over the
past half year, bigger was clearly better on the world's
stock markets. This
was most apparent in the U.S., where investors abandoned
smaller companies in
favor of familiar blue-chip names. Amid this weak
environment, especially in
the U.S. where we hold 28% of our assets, the Prudential
Global Genesis Fund
declined slightly during the reporting period, as did the
average global small
company fund as measured by Lipper Analytical Services.
<TABLE>
Cumulative Total Returns1 As
of 11/30/96
<CAPTION>
Six One Five
Since
Months Year Years
Inception2
<S> <C> <C> <C>
<C>
Class A -1.3% 11.2% 91.2%
(90.7)4 79.0% (78.7)4
Class B -1.6 10.3 84.1
(83.6)4 128.5 (128.1)4
Class C -1.6 10.3 N/A
12.3 (12.0)4
Class Z N/A N/A N/A
5.3
Lipper Global
Small Co. Fund Avg3 -1.2 17.6 80.7
159.4
</TABLE>
<TABLE>
Average Annual Total Returns1 As
of 12/31/96
<CAPTION>
One Five
Since
Year Years
Inception2
<S> <C> <C> <C>
Class A 4.5% 11.4% (11.1)4
8.0% (7.8)4
Class B 4.2 11.6 (11.3)4 9.8
(9.5)4
Class C 8.2 N/A 5.1
(4.9)4
</TABLE>
Past performance is not indicative of future results.
Principal and investment
return will fluctuate so that an investor's shares, when
redeemed, may be worth
more or less than their original cost.
1Source: Prudential Mutual Fund Management and Lipper
Analytical Services. The
cumulative total returns do not take into account sales
charges. The average
annual total returns do take into account applicable sales
charges. The Fund
charges a maximum front-end sales load of 5% for Class A
shares and a declining
contingent deferred sales charge (CDSC) of 5%, 4%, 3%, 2%,
1% and 1% for six
years, for Class B shares. Class C shares have a 1% CDSC for
one year. Class B
shares will automatically convert to Class A shares on a
quarterly basis,
approximately seven years after purchase. Class Z shares are
not subject to a
sales charge or a distribution fee. Class Z shares have been
in existence for
less than one year and average annual returns are not
available.
2Inception dates: 1/22/90 Class A; 1/29/88 Class B; 8/1/94
Class C; 9/12/96
Class Z.
3Lipper average returns are for 28 funds for six months, 27
funds for one year,
nine funds for five years and 76 funds since inception of
the Class A shares on
1/22/90.
4Without waivers and expense subsidies the Fund's average
and cummulative total
returns would have been lower, as indicated in parentheses (
).
How Investments Compared.
(As of 11/30/96)
(GRAPH)
U.S. General General U.S.
Growth Bond Muni Debt Taxable
Funds Funds Funds Money Funds
Source: Lipper Analytical Services. Financial markets
change, so a mutual
fund's past performance should never be used to predict
future results. The
risks to each of the investments listed above are different
- -- we provide 12-
month total returns for several Lipper mutual fund
categories to show you that
reaching for higher yields means tolerating more risk. The
greater the risk,
the larger the potential reward or loss. In addition, we've
included historical
20-year average annual returns. These returns assume the
reinvestment of
dividends.
U.S. Growth Funds will fluctuate a great deal. Investors
have received higher
historical total returns from stocks than from most other
investments. Smaller
capitalization stocks offer greater potential for long-term
growth but may be
more volatile than larger capitalization stocks.
General Bond Funds provide more income than stock funds,
which can help smooth
out their total returns year by year. But their prices still
fluctuate
(sometimes significantly) and their returns have been
historically lower than
those of stock funds.
General Municipal Debt Funds invest in bonds issued by state
governments, state
agencies and/or municipalities. This investment provides
income that is usually
exempt from federal and state income taxes.
Money Market Funds attempt to preserve a constant share
value; they don't
fluctuate much in price but, historically, their returns
have been generally
among the lowest of the major investment categories.
<PAGE>
Steve Auth, Fund Manager (PHOTO)
Portfolio
Manager's Report
The Prudential Global Genesis Fund seeks to achieve long-
term growth of capital
by investing in common stocks of smaller foreign and U.S.
companies. The Fund
is subject to all the risks associated with foreign
investing, including
currency, political and social risks and illiquidity. There
can be no assurance
that the Fund will achieve its investment goal.
Strategy Session.
As growth investors in a global marketplace, we search
around the world for
small companies with strong management, good products and
competitive positions
in their industries. When we find such companies, we follow
their stocks
closely and look to buy them at prices where they'll give us
a better return
than that of the market.
When we took over the Fund in October, we saw attractive
investment
opportunities in Europe and Japan. In both regions,
governments are moving to
overcome lethargic economic growth by deregulating their
economies and lowering
interest rates. These fundamental changes are creating a
fertile environment in
which small companies can flourish.
In Japan, we were particularly enthusiastic about industries
(such as retail,
health care, financial services, and electronics) which are
benefitting from
structural changes underway in that country. These trends
include an aging
population, a rising demand for imports and the waning
influence of Japan's
farmers -- all of which are leading Japan's economy to
become more service
oriented. We think smaller, more nimble companies in the
service sectors will
make attractive investment opportunities.
European corporations are also aggressively restructuring to
become more
efficient global competitors. We expect these changes to pay
off over the next
three years, and we believe smaller companies can deliver
strong earnings over
this period. As in Japan, our European holdings included
companies in newer
industries that we think will benefit most from structural
changes in the
economy. For example, concerns about health-care costs in
Europe have created
opportunities for smaller companies that can deliver more
cost-effective care.
Portfolio Breakdown.
Expressed as a percentage of
total investments as of 11/30/96.
(PIE CHART)
New Global Team.
In October, Prudential Investments' global small company
investment team,
headed by Stephen Auth, took over management of the
Prudential Global Genesis
Fund. Steve, who's been with Prudential since 1985, lived in
Japan for three
years while setting up the company's small company team for
Japan. He now
leads a group of 28 investment managers and analysts --
based on four
continents -- who comb the world looking for attractive
investment
opportunities.
<PAGE>
What Went Well.
Making Changes.
After we took over the Fund in October, we sold stocks that
no longer fit our
investment style. (We look more at individual companies and
less at broad
investment themes.) We bought many with good prospects at
attractive prices.
These changes already started to pay off in November, when
the Fund's net
asset value climbed 5.4% -- compared with a 3.8% rise in the
Salomon Brothers
EMI World Index, a global small company index. We saw
especially strong early
returns from small industrial firms and banks in Hong Kong -
- - companies that
benefit from their proximity to China's fast-growing
economy.
Electronics Recovery.
We also saw good returns late in the period from electronics
companies.
Early in the year, an excess supply of electronics
components in world
markets depressed the stock prices of these companies.
Looking beyond the
short-term problems, we see a fast-growing industry where
dynamic smaller
companies can thrive. In fact, some of the Fund's biggest
winners over the past
six months were in electronics stocks -- such as Vitesse
Semiconductor (up
70%), SGS Thompson (up 57%) and Nokia (up 25%). We've since
taken profits in
these stocks, while adding an even larger number of growing
technology
companies from Europe, the U.S. and Asia.
And Not So Well.
U.S. Blues.
We invest in small companies, so we didn't share in the
spectacular rise in
large company stocks from the U.S. Over the past six months,
the Dow Jones
Industrial Average -- which measures the performance of the
30 largest and
most well-known U.S. stocks -- rose 15%. This compares to a
decline of 1.4%
in the Russell 2000 -- a U.S. small stock index -- over the
same period. It
wasn't always bad news for small company stocks in 1996,
though. They led the
market in the first half of 1996, thanks to their compelling
prospects for
growth in sales and earnings. But in the summer, small
company stocks took a
big dive, when it seemed as if earnings growth had slowed,
especially among
some technology companies. Many of these stocks never fully
recovered, as
nervous investors looked for safety, favoring larger
companies with more
predictable earnings growth.
Five Largest Issuers.
1.5% Borders Group
Retail
1.4% Hock Hua Bank Berhad
Banking
1.3% Le Carbone Lorraine
Industrial Materials
1.3% Singapore Finance, Ltd.
Financial Services
1.1% T. Rowe Price
Financial Services
Expressed as a percentage of total net assets as of
11/30/96.
Looking Ahead.
Although small company stocks historically have performed
better than larger
companies, that wasn't the case over the last six months --
and our results
reflect this. We think this weaker performance by small
company stocks is about
to reverse itself. Larger companies -- especially in the
U.S. -- have enjoyed
superior earnings growth over the last three years, driven
largely by cost
cutting. However, we expect their earnings growth rates to
slow, making them
less attractive to investors. We've invested the Fund in a
broad group of
growing small companies throughout the world, many in
emerging industries such
as technology and healthcare, and in regions growing faster
than the world
average, like Southeast Asia. We believe these investments
may help to enhance
return going forward.
- ------------------------------------------------------------
- -------------------
1
<PAGE>
Meet The Manager: An Interview With Steve Auth.
We sat down one day after the U.S. markets had closed and
talked with Steve
Auth to get a better sense of his team's investment style.
Q. Steve, why are you focusing on small-company stocks?
A. We make money for our shareholders by being one step
ahead of the market.
Because fewer analysts follow small stocks, we have a better
chance of
discovering promising companies at attractive prices. As you
may also know,
studies have shown that over the long run, small company
stocks have
outperformed large company stocks (though, of course, past
performance is no
guarantee of future results).
Q. Tell us how you go about adding a stock to the Fund.
A. There are about 6,000 small company stocks around the
world, and most are
worth at least one look. Over time, we've whittled that
number down to about
1,000 -- companies with solid management teams, promising
products and strong
competitive positions. We'd be willing to buy these
companies at the right
price.
Q. How do you keep track of 1,000 companies?
A. It's a big job. That's why we have a team of 28
investment managers and
analysts in four cities around the world. We're constantly
visiting companies
to meet with management. We also get useful information by
talking with
competitors and analysts and visiting factories and stores
where the products
are made and sold. We maintain a database in each region
which keeps current
information onall the stocks we're following, as well as our
earnings and
valuation forecasts and the current stock prices.
Q. What makes a company attractive?
A. The most important thing is the company's expected
profits. We try to
forecast earnings for three years into the future. We also
think the quality
of management is critical. We like companies that occupy a
leading position in
their industry. Finally, we pay close attention to a
company's balance sheet.
We carefully analyze its assets and liabilities, so we can
spot potential
problems that could only become obvious later.
Q. Where is your favorite market right now?
A. Currently, we think Hong Kong has some of the most
underpriced growth stocks
in the world. Because Hong Kong ties the value of its
currency to the U.S.
dollar, its markets are very sensitive to U.S. interest
rates. Until very
recently, worries about U.S. interest rate increases have
caused some investors
to avoid Hong Kong stocks, especially in the real estate and
banking sectors,
the most sensitive to changes in the lending rate. There's
also the China
factor -- next summer political control of Hong Kong passes
from Britain to
China. That's made some investors nervous. We think the
transition is a
positive for Hong Kong. In fact, we think Hong Kong will
become the Manhattan
of China -- providing the financial markets China needs to
develop.
(PHOTO)
- ------------------------------------------------------------
- -------------------
2
<PAGE>
President's Letter
January 1, 1997
(PHOTO)
Dear Shareholder:
For many investors, 1996 may well be the second year of back-
to-back, double-
digit stock market returns. In late November, the Dow Jones
Industrial Average
passed 6500 -- only weeks after breaking the 6000 mark in
mid-October.
America's economic expansion is entering its sixth year and
there seems little
evidence of an end to the continued modest growth and low
inflation we've
enjoyed for the last several years.
This is good news. For most investors it's meant an increase
in their share
values for college funds, retirement nest eggs or other long-
term financial
goals. However, as you read your year-end account statements
and make plans
for 1997, it's important to remember that there never is a
"sure thing" when it
comes to investment returns. Stock and bond markets go down
just as they go up.
(Did you notice the brief period of decline this past
summer?) No one likes to
see the value of their investments fall but such periods
remind us we must keep
our expectations realistic.
Regardless of the market's direction, a wise investor plans
for tomorrow's
needs today. Your Financial Advisor or Registered
Representative can help you:
- - Review your portfolio and suggest strategies for 1997,
such as diversifying
across different types of investments. Financial markets
seldom move in
lockstep. By investing in a mix of stock and bond funds
(foreign & domestic)
and money market funds you may be in a better position to
achieve your long-
term goals and to weather periods of uncertainty.
- - See why annuities have become popular retirement planning
tools. The choices
are broader than ever. Our new Discovery SelectSM
Variable Annuity offers
you many of the keys to successful retirement planning,
including a
personalized asset allocation program and a choice of 21
variable- or fixed-
rate investment options offering a broad array of
investment objectives and
styles.
- - Explain new retirement savings developments. For example,
Congress has
expanded the contribution limit on spousal IRAs. And
don't forget, it's not
too late for you to make a contribution to your IRA or
open one for 1996.
The IRS deadline is April 15, 1997, but it's best to act
sooner.
Why not contact your Financial Advisor or Registered
Representative today? If
you are interested in Discovery SelectSM call for a
prospectus, which contains
more complete information. Read it carefully before you
invest.
Sincerely,
Richard A. Redeker
President
P.S. Your 1997 Prudential IRA contribution may qualify you
for a waiver of the
annual custodial fee. Ask your financial representative for
details.
- ------------------------------------------------------------
- -------------------
3
<PAGE>
Portfolio of Investments as of PRUDENTIAL GLOBAL GENESIS
November 30, 1996 (Unaudited) FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note
1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS--94.6%
COMMON STOCK--92.2%
- ------------------------------------------------------------
Australia--1.6%
1,005,900 Burswood Property Trust
(Leisure & Tourism) $
1,256,759
72,150 Goodman Fielder Ltd.
(Food Processing)
93,558
330,000 Publishing & Broadcasting, Ltd.
(Broadcasting & Publishing)
1,557,570
32,001 Sea World Property Trust, Ltd.
(Leisure & Tourism)
36,846
--------
- -----
2,944,733
- ------------------------------------------------------------
Belgium--1.3%
9,950 Barco Industries NV
(Electrical & Electronics)
1,715,463
3,042 D'Ieteren NV SA*
(Automobiles & Parts)
624,182
--------
- -----
2,339,645
- ------------------------------------------------------------
Canada--0.4%
50,000 Laurentian Bank Of Canada* (Banking)
758,753
- ------------------------------------------------------------
Federal Republic of Germany--2.3%
15,937 Adidas AG* (Recreation & Other
Consumer Goods)
1,377,093
970 Buderus AG (Machinery & Engineering)
455,428
16,130 Schwarz Pharma AG* (Pharmaceuticals)
1,184,180
10,790 SGL Carbon* (Industrial Materials)
1,324,916
--------
- -----
4,341,617
- ------------------------------------------------------------
Finland*--1.2%
36,370 Raison Tehtaat OY (Food &
Household Products)
2,191,676
- ------------------------------------------------------------
France--3.5%
1,863 Elf Gabon (Energy Sources)
436,529
1,170 GFI Industries SA (Machinery &
Engineering)
170,162
14,602 Le Carbone Lorraine*
(Industrial Matterials)
2,385,254
6,926 Manutan (Miscellaneous)
629,275
23,000 SGS Thomson Microelectronics NV*
(Electronic Components) $
1,519,989
14,016 Societe Technip (Multi-Industry)
1,313,665
--------
- -----
6,454,874
- ------------------------------------------------------------
Hong Kong--8.2%
266,000 ASM Pacific Technology*
(Machinery & Engineering)
225,336
2,856,000 Chen Hsong Holdings (Machinery &
Engineering)
1,643,714
8,000 Cheung Kong* (Real Estate)
70,357
880,000 China Resources Enterprises
(Conglomerate)
1,263,321
84,000 Esprit Asia Holdings, Ltd. (Retail)
35,617
605,099 First Pacific Co. (Retail)
841,285
1,921,000 Goldlion Holdings, Ltd. (Retail)
1,602,490
270,000 Guangdong Investments* (Conglomerate)
225,233
13,000 Henderson Land Development*
(Real Estate)
130,723
40,000 Hong Kong & Shanghai Hotels*
(Leisure & Tourism)
79,669
196,000 Hongkong Electric Holdings*
(Energy Source)
628,660
3,351,000 Hung Hing Printing Group
(Mterial Processing)
1,083,484
70,000 Hysan Development Co.* (Real Estate)
267,525
2,074,000 Innovative International
Holdings, Ltd.* (Electrical &
Electronics)
858,355
922,000 International Bank Of Asia, Ltd.*
(Banking)
637,959
266,000 JCG Holdings, Ltd. (Finance)
252,858
269,000 Ka Wah Bank* (Banking)
115,678
1,728,000 Kingboard Chemical Holdings*
(Electronic Components)
346,405
508,000 Li & Fung, Ltd.* (Merchandising)
473,047
2,532,000 Lung Kee (Bermuda) Holdings
(Industrial Components)
744,995
</TABLE>
- ------------------------------------------------------------
- -------------------
4 See Notes to
Financial Statements.
<PAGE>
Portfolio of Investments as of PRUDENTIAL GLOBAL GENESIS
November 30, 1996 (Unaudited) FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note
1)
<C> <S> <C>
- ------------------------------------------------------------
Hong Kong (cont'd)
338,000 National Mutual Asia, Ltd.
(Insurance) $
308,187
1,568,000 Regal Hotel International*
(Leisure & Tourism)
517,124
557,000 Union Bank Hong Kong (Banking)
680,762
306,500 Varitronix International, Ltd.*
(Electronic Components)
568,841
132,500 Wing Hang Bank Ltd.* (Banking)
592,925
3,113,000 Wong's International Holdings*
(Electronic Components)
996,466
--------
- -----
15,191,016
- ------------------------------------------------------------
Indonesia--1.1%
64,000 Citra Marga Nusadh*
(Transportation-Road)
53,902
215,500 London Sumatra* (Food Manufacturing)
585,847
555,000 Semen Cibinong (Building Materials
Components)
1,420,043
--------
- -----
2,059,792
- ------------------------------------------------------------
Ireland--0.9%
394,000 Fyffes PLC* (Food/Drug Retail)
695,645
222,000 Irish Life PLC* (Insurance)
1,026,568
--------
- -----
1,722,213
- ------------------------------------------------------------
Italy--0.5%
13,390 Fila Holding SpA (ADR)
(Recreation & Other Consumer Goods)
990,860
- ------------------------------------------------------------
Japan--14.8%
28,000 ADO Electronic Industrial Co., Ltd.*
(Data Processing & Reproduction)
673,869
18,600 Advantest Corp.* (Electronic
Components & Instruments)
793,992
39,300 Aiwa Co. (Appliances & Household
Durables)
728,353
11,000 Create Medic Co. (Healthcare)
140,888
50,100 Dainichi Co., Ltd.*(Appliances &
Household Durables)
704,084
10,000 Daiseki Co., Ltd.*(Business &
Public Services) $
254,721
77,000 Daiwa Industries
(Machinery & Engineering)
703,382
118,000 Descente Ltd.* (Textiles)
667,475
16,300 Doutor Coffee Co., Ltd. (Leisure &
Tourism)
694,092
54,000 Furusato Industries* (Building
Materials & Components)
616,601
16,600 Geomatec Co.* (Technology)
488,450
38,000 Ito En Ltd.* (Beverages)
720,949
48,000 Jonathans Co., Ltd. (Leisure & Tourism)
695,652
33,000 Kawasumi Laboratories* (Healthcare)
408,696
19,000 Kimoto Co., Ltd.* (Miscellaneous)
300,395
29,000 King Jim (Miscellaneous)
613,878
29,000 Kissei Pharmaceutical*
(Pharmaceuticals)
703,030
3,000 Komatsu Wall Industry* (Building
Materials & Components)
52,701
23,600 Matsumotokiyoshi* (Retail)
800,141
54,000 Meiden Engineering Co.* (Engineering)
654,545
7,000 Meiko Shokai Co.* (Business &
Public Services)
288,977
26,800 Ministop Co., Ltd.* (Food Retail)
701,484
30,800 Misumi Corp. (Industrial Components)
689,855
30,900 Mitsui High-Tec* (Industrial
Components & Instruments)
656,812
47,000 Miura* (Product Durables)
689,416
41,000 Nagawa Co.* (Construction & Housing)
608,608
17,000 Nemic-Lambda KK* (Electronic
Components & Instruments)
530,083
10,100 Nichiei Co., Ltd. (Finance)
703,496
39,100 Nichiha* (Building Materials &
Components)
734,949
16,000 Nichii Gakkan Co.* (Business & Public
Services)
758,893
63,000 Nippon Denwa Shisetsu*
(Construction & Housing)
603,162
47,000 Nireco Co., Ltd.*
(Machinery & Engineering)
627,492
90 Nissen (Merchandising)
685
</TABLE>
- ------------------------------------------------------------
- -------------------
See Notes to Financial Statements.
5
<PAGE>
Portfolio of Investments as of PRUDENTIAL GLOBAL GENESIS
November 30, 1996 (Unaudited) FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note
1)
<C> <S> <C>
- ------------------------------------------------------------
Japan (cont'd)
101,000 NOK*(Auto Components) $
727,448
21,500 Oiles Corp.*(Industrial Components)
679,842
900 Osaka Steel Co., Ltd.*(Steel & Metal
Products)
12,648
105,000 OSG Corp.(Industrial Components)
643,742
6,600 Paris Miki, Inc.*(Retail)
260,870
44,100 Pigeon Corp.*(Consumer Stap les)
670,119
8,400 Ryohin Keikaku Co., Ltd.*(Retail)
634,519
35,200 Sato Corp.*(Machinery & Engineering)
711,111
600 Seijo Corp.*(Retail)
12,227
19,300 Shimamura Co., Ltd.*(Retail)
722,161
15,600 Square Co., Ltd.*(Recreation & other
Consumer Goods)
753,623
20,000 SRL, Inc. (Healthcare)
346,069
55,000 Terumo*(Healthcare)
724,638
27,000 Trancom Co., Ltd.*
(Transportation-Road & Rail)
277,470
18,000 Tsuchiya Home Co.*(Construction &
Housing)
275,099
49,000 UP, Inc.*(Recreation & other
Consumer Goods)
645,586
27,000 Yamamoto Chemicals, Inc.*
(Chemicals)
426,877
--
- --------
27,533,855
- ------------------------------------------------------------
- ---------
Korea--0.1%
5,300 Dong Ah Construction Industry
Co., Ltd. (Construction & Housing)
135,545
- ------------------------------------------------------------
- ----------
Malaysia--3.1%
31,000 Cycle & Carriage Bintang Berhad*
(Manufacturing & Distribution)
195,053
121,000 Gadek Berhad*(Multi-Industry)
1,039,058
233,333 Gadek Capital Berhad (Multi-Industry)
618,651
565,000 Hock Hua Bank Berhad (Banking)
2,571,231
108,000 IOI Properties Berhad (Real Estate)
354,729
116,000 Leader Universal Holdings*
(Industrial Components)
261,654
164,000 Nylex (Malaysia) Berhad (Industrial
Manufacturing)
373,170
153,000 Public Bank Berhad*(Banking) $
326,949
----
- -------
5,740,495
- ------------------------------------------------------------
- -------
Netherlands--4.3%
47,450 Baan Company NV* (Technology)
1,690,406
47,000 Getronics NV*(Technology)
1,257,835
19,400 Hagemeyer NV (Wholesale &
International Trade)
1,538,469
37,210 New Holland NV*(Machinery &
Engineering)
748,851
88,000 Toolex Alpha NV*(ADR) (Machinery)
836,000
47,950 Ver Ned Uitgevers (Broadcasting,
Publishing & Advertising)
977,721
10,060 Volker Stevin-CVA*
(Construction & Housing)
909,089
---
- -------
7,958,371
- ------------------------------------------------------------
- ------
New Zealand--0.3%
1,300,000 Affco Holdings, Ltd. (Food &
Household Products)
508,680
Norway--0.5%
36,150 Ark ASA*(Data Processing &
Reproduction)
261,785
60,500 Ask ASA*(Electrical Equipment)
612,425
---
- -------
874,210
- ------------------------------------------------------------
- -------
The Philippines*--0.2%
147,400 C & P Homes (Real Estate)
72,898
867,200 Filinvest Land, Inc. (Real Estate)
306,816
186,700 Marsman & Co., Inc. (Wholesale
Distribution)
52,915
100,000 Robinson's Land Corp. (Real Estate)
18,641
--
- -------
451,270
- ------------------------------------------------------------
- --------
Singapore--1.9%
48,000 ACMA Ltd.*(Electrical & Electronics)
108,834
21,000 City Developments (Real Estate)
185,668
155,000 Informatics Holdings
(Consumer Goods & Services)
67,415
201,000 Robinson & Co. (Retail)
867,059
</TABLE>
- ------------------------------------------------------------
- -------------------
6 See Notes to
Financial Statements.
<PAGE>
Portfolio of Investments as of PRUDENTIAL GLOBAL GENESIS
November 30, 1996 (Unaudited) FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note
1)
<C> <S> <C>
- ------------------------------------------------------------
Singapore (cont'd)
1,422,000 Singapore Finance, Ltd.
(Financial Services) $
2,321,840
----
- -------
3,550,816
- ------------------------------------------------------------
- -
Spain--2.1%
11,750 Azkoyen SA (Machinery &
Engineering)
973,807
69,725 Centros Commerciale Pryca (Retail)
1,462,123
5,496 Cortefiel Sa (Retail)
167,690
962,000 Tubacex*(Steel & Metals)
1,386,894
-----
- ------
3,990,514
- ------------------------------------------------------------
- ------
Sweden--0.7%
9,300 Hennes & Mauritz AB (Retail)
1,338,726
- ------------------------------------------------------------
- ------
Switzerland*--2.8%
775 Fotolabo SA (Recreation & Other
Consumer Goods)
302,758
696 Kuoni Reisebuerou AG
(Leisure & Tourism)
1,546,074
521 SIG PLC (Machinery & Engineering)
1,253,114
1,423 Stratec Holding AB (Healthcare)
1,776,706
1,848 Tag Heuer International SA
(Consumer Staples)
261,877
----
- -----
5,140,529
- ------------------------------------------------------------
- ------
Thailand*--0.8%
76,000 Industrial Finance Corp. of Thailand
(Financial Services)
239,499
283,900 Siam City Bank Public Co., Ltd.
(Banking)
333,412
24,400 Siam Commercial Bank Public
Co., Ltd. (Banking)
212,050
30,400 Siam General Factoring (Finance)
45,222
26,700 Srithai Superware Co., Ltd.
(Household Products)
130,129
165,000 Thai Military Bank, Ltd. (Banking)
435,995
8,100 Thai Storage Battery PLC
(Automotive Parts)
22,196
----
- ------
1,418,503
- ------------------------------------------------------------
- -------
United Kingdom--12.1%
1,495,000 Albert Fisher Group PLC*
(Food Processing) $
1,068,396
253,200 Astec (BSR) PLC*
(Electrical & Electronics)
681,217
68,500 Capital Radio PLC (Publishing,
Broadcasting & Advertising)
656,550
91,900 Carpetright PLC (Retail)
995,184
50,000 CMG PLC*(Technology)
718,850
109,300 Dorling Kindersley Holdings, Ltd.
(Publishing, Broadcasting & Advertising)
982,358
37,500 Dr. Solomon's Group Plc (Computer
Software & Services)
646,875
272,000 Firstbus PLC*
(Transportation-Road & Rail)
885,018
199,000 Goldsmiths Group (Retail)
1,338,490
105,000 Henlys Group PLC*
(Machinery & Engineering)
962,250
615,000 Holliday Chemical Holdings PLC*
(Chemicals)
1,292,669
31,400 Invesco Funding LLC (Rights) expiring
12/18/96 (Financial Services)
22,836
157,000 Invesco PLC (Finance) 694,316
323,000 Kwik Fit Holdings PLC*(Retail)
1,211,182
227,200 Limelight Group PLC*(Housing)
680,034
148,100 London Clubs International
(Leisure & Tourism)
824,300
161,000 Medeva PLC*(Pharmaceuticals)
690,348
88,900 Misys PLC*(Data Processing &
Reproducton)
1,488,892
125,000 Mowlem (John) & Co. PLC*
(Construction)
241,718
65,600 Powerscreen International PLC
(Machinery & Engineering)
659,640
168,500 Sage Group PLC (The)*(Accounting
Software)
1,464,848
973,000 SEP Industrial Holdings PLC*
(Data Processing & Reproduction)
842,601
125,000 Serco Group PLC (Business &
Public Services)
1,397,764
51,100 Severfield-Reeve PLC*(Machinery &
Engineering)
286,132
</TABLE>
- ------------------------------------------------------------
- -------------------
See Notes to Financial Statements.
7
<PAGE>
Portfolio of Investments as of PRUDENTIAL GLOBAL GENESIS
November 30, 1996 (Unaudited) FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note
1)
<C> <S> <C>
- ------------------------------------------------------------
United Kingdom (cont'd)
105,000 Spirax-Sarco Engineering PLC
(Machinery & Engineering) $
1,318,900
386,000 Wescol Group PLC*(Machinery &
Engineering)
340,760
----------
- --
22,392,128
- ------------------------------------------------------------
- --
United States--27.5%
61,300 ABT Building Products Corp.*(Building
Materials & Components)
1,471,200
1,400 Actel Corp.*(Technology)
30,800
69,100 AGCO Corp.*
(Product Durables)
1,926,162
77,900 Allied Products Corp. (Machinery &
Engineering)
1,859,862
26,200 Altron, Inc.*(Electrical & Electronics)
491,250
46,500 Alyn Corp.*(Materials Processing)
604,500
74,500 Apria Healthcare Group, Inc.*
(Healthcare)
1,341,000
27,900 Asyst Technologies, Inc.*(Technology)
547,538
80,300 Beazer Homes USA, Inc.*
(Construction & Housing)
1,294,838
71,400 Belmont Homes, Inc.*(Manufacturing-
Housing)
678,300
50,000 Bertucci's, Inc.*(Food-Retail)
265,625
76,400 Borders Group, Inc.*(Retail)
2,788,600
14,000 Cidco, Inc.*(Telecommunications)
273,000
2,600 Cleveland-Cliffs, Inc. (Mining)
115,050
24,600 D.R.Horton, Inc.*(Housing)
258,300
100,900 Dames & Moore, Inc.*(Engineering)
1,374,762
39,700 Day Runner, Inc.*(Consumer Goods)
962,725
106,000 Decisionone Corp.*(Computer
Software & Services)
1,643,000
78,300 Digi International, Inc.*(Computer
Software & Services)
1,027,688
40,100 Financial Security Assurance Holdings
International*(Financial Services)
1,273,175
39,900 FSI International, Inc.*
(Machinery & Engineering)
578,550
29,000 Gainsco, Inc.*(Financial Services)
271,875
54,100 Galoob Lewis Toys, Inc.*(Leisure) $
1,575,662
31,300 Greenfield Industries, Inc. (Industrial
Components)
915,525
24,500 GTECH Holdings Corp.*
(Consumer Goods & Services)
771,750
9,600 Healthdyne Technologies, Inc. *
(Healthcare)
87,600
29,400 Healthsource, Inc.*(Healthcare)
330,750
63,300 Holophone Corp.*
(Electrical Equipment)
1,202,700
37,700 In Focus Systems, Inc.*(Technology)
801,125
5,000 Insituform Technologies, Inc.*
(Engineering & Construction)
38,750
15,600 International Imaging Materials, Inc.*
(Technology)
374,400
45,000 Invacare Corp. (Healthcare)
1,215,000
4,000 Invivo Corp.*(Healthcare)
56,000
67,900 Jacobs Engineering Group, Inc.*
(Engineering & Construction)
1,638,087
118,000 Landec Corp.*(Chemicals)
1,003,000
5,000 Medusa Corp. (Building Materials &
Components)
173,125
19,200 Merix Corp.*(Electronic Components)
312,000
15,600 Nichols Research Corp.*(Technology)
382,200
9,000 Panavision, Inc.*(Miscellaneous)
201,375
28,000 Patterson Dental Co.*(Healthcare)
735,000
15,000 Pillowtex Corp. (Consumer Goods)
260,625
6,000 Piper Jaffray Cos., Inc. (Financial Services)
87,750
32,800 Primark Corp. (Computer
Software & Services)
861,000
27,400 Quanex Corp. (Steel & Metals)
732,950
6,500 Raymond James Financial, Inc.
(Financial Services)
184,438
16,600 Resmed, Inc.*(Healthcare)
311,250
25,600 Rotech Med Corp.*(Healthcare)
435,200
38,200 Scientific Games Holdings Corp.*
(Consumer Goods)
1,007,525
17,400 Strattec Security Corp.*
(Auto Components)
282,750
72,600 Summit Care Corp.*(Healthcare)
1,089,000
165,200 Sunglass Hut Intl., Inc. * (Retail)
1,218,350
</TABLE>
- ------------------------------------------------------------
- -------------------
8 See Notes to
Financial Statements.
<PAGE>
Portfolio of Investments as of PRUDENTIAL GLOBAL GENESIS
November 30, 1996 (Unaudited) FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note
1)
<C> <S> <C>
- ------------------------------------------------------------
United States (cont'd)
57,400 T. Rowe Price & Associates, Inc.
(Financial Services) $
2,073,575
40,300 The Learning Co., Inc.*(Computer
Software & Services)
680,063
19,600 Toll Brothers Inc.*
(Construction & Housing)
389,550
50,000 Triangle Pacific Corp.*
(Building Materials & Components)
1,090,625
71,500 United States Office Products Co.*
(Office Equipment & Supplies)
2,216,500
9,000 Vital Signs, Inc. (Healthcare)
196,875
11,200 Vitesse Semiconductor Corp.*
(Technology)
534,800
4,400 Walbro Corp. (Auto Components)
86,900
86,500 Western National Corp. (Insurance)
1,611,062
20,700 Wolverine Tube, Inc.*
(Steel & Metals)
771,075
9,300 Wonderware Corp.*(Engineering)
87,188
49,900 Wyle Electronics (Industrial Electronics)
1,796,400
----------
- --
50,897,300
----------
- ---
Total common stocks
(cost US$153,785,102)
170,926,121
----------
- ---
- ------------------------------------------------------------
- ----
PREFERRED STOCKS*--1.8%
Federal Republic of Germany--1.3%
5,950 Fresenius AG (Healthcare)
1,198,350
19,800 Moebel Walther AG (Retail)
1,279,950
----------
- ---
2,478,300
- ------------------------------------------------------------
- ----
Netherlands--0.5%
45,500 NBM Amstelland NV (Construction
& Housing)
959,393
----------
- ---
Total preferred stocks
(cost US$3,519,046)
3,437,693
----------
- ---
WARRANTS*--0.6%
- ------------------------------------------------------------
- ----
Malaysia--0.6%
233,000 Gadek Berhad
expiring 12/19/00 @ MYR 11.95
(Multi-Industry)
(cost US$337,439) $
1,032,687
----------
- ---
Total long-term investments
(cost US$157,641,587)
175,396,501
----------
- ---
Principal
Amount
(000)
SHORT-TERM INVESTMENTS--1.7%
- ------------------------------------------------------------
- ---
Repurchase Agreement--1.7%
United States--1.7%
US$3,124 Joint Repurchase Agreement Account,
5.548%, 11/01/96
(cost US$3,124,000; Note 5)
3,124,000
----------
- ---
- ------------------------------------------------------------
- ----
Total Investments--96.3%
(cost US$160,765,587; Note 4)
178,520,501
Other assets in excess of
liabilities--3.7%
6,813,083
----------
- ---
Net Assets--100% $
185,333,584
----------
- ---
----------
- ---
</TABLE>
- -----------
* Non-inome producing security.
ADR--American Depository Receipt.
GDR--Global Depository Receipt.
<PAGE>
Statement of Assets and PRUDENTIAL GLOBAL
GENESIS
Liabilities (Unaudited) FUND, INC.
- ------------------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Assets
November 30, 1996
- ------------------
<S>
<C>
Investments, at value (cost
$160,765,587).....................................
$ 178,520,501
Foreign currency, at value (cost
$11,105,786).................................
10,924,343
Cash........................................................
.................. 6,257
Receivable for investments
sold...............................................
3,569,369
Forward currency contracts - net amount receivable from
counterparties........ 1,277,655
Receivable for Fund shares
sold...............................................
1,024,258
Dividends and interest
receivable.............................................
167,993
Other
assets......................................................
............ 4,506
- --------------
Total
assets......................................................
........ 195,494,882
- --------------
Liabilities
Payable for investments
purchased............................................
8,198,488
Forward currency contracts- net amount payable to
counterparties............. 771,782
Accrued expenses and other
liabilities.......................................
529,302
Payable for Fund shares
reaquired............................................
377,835
Management fee
payable.....................................................
.. 151,428
Distribution fee
payable.....................................................
122,723
Withholding taxes
payable....................................................
9,740
- --------------
Total
liabilities.................................................
... 10,161,298
- --------------
Net
Assets......................................................
............. $ 185,333,584
- --------------
- --------------
Net assets were comprised of:
Common stock, at
par....................................................
$ 89,277
Paid-in capital in excess of
par........................................
139,910,927
- --------------
140,000,204
Undistributed net investment
Income.....................................
73,414
Accumulated net realized gain on investments and
foreign currency
transactions................................................
........... 27,135,083
Net unrealized appreciation on investments and foreign
currency
transactions................................................
........... 18,124,883
- --------------
Net assets, November 30, 1996
$ 185,333,584
- --------------
- --------------
Class A:
Net asset value and redemption price per share
($46,936,848/2,186,806 shares of common stock issued
and outstanding).. $21.46
Maximum sales charge (5.00% of offering
price)...........................
1.13
- ------
Maximum offering price to
public.........................................
$22.59
- ------
- ------
Class B:
Net asset value, offering price and redemption price per
share
($136,450,162/6,646,097 shares of common stock issued
and outstanding).. $20.53
- ------
- ------
Class C:
Net asset value, offering price and redemption price per
share
($1,944,685/94,721 shares of common stock issued and
outstanding)...... $20.53
- ------
- ------
Class Z:
Net asset value, offering price and redemption price per
share
($1,889.75/87.689 shares of common stock issued and
outstanding)....... $21.55
- ------
- ------
</TABLE>
- ------------------------------------------------------------
- -------------------
10 See Notes to
Financial Statements.
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND, INC.
Statement of Operations (Unaudited)
- ------------------------------------------------------------
- -
<TABLE>
<CAPTION>
Six
Months
Ended
Net Investment loss November 30,
1996
-------------
- -----
<S> <C>
Income
Dividends (net of foreign withholding taxes
of $110,705).................................. $
1,125,338
Interest (net of foreign withholding taxes of $115)
162,817
-------
- ------
Total income....................................
1,288,155
-------
- ------
Expenses
Management fee....................................
959,112
Distribution fee--Class A.........................
59,091
Distribution fee--Class B.........................
712,415
Distribution fee--Class C.........................
10,331
Transfer agent's fees and expenses................
251,000
Custodian's fees and expenses.....................
175,000
Reports to shareholders...........................
90,000
Registration fees.................................
56,000
Audit fees and expenses...........................
31,000
Legal Fees and expenses...........................
15,000
Directors' fees and expenses......................
13,000
Miscellaneous.....................................
13,645
--------
- -----
Total expenses.....................................
2,385,594
--------
- -----
Net investment loss................................
(1,097,439)
--------
- -----
Realized and Unrealized Gain(Loss)
on Investments and Foreign
Currency Transactions
Net realized gain on:
Investment transactions...........................
30,603,748
Foreign currency transactions.....................
1,957,349
--------
- -----
32,561,097
--------
- -----
Net change in unrealized
appreciation/depreciation on:
Investment transactions..........................
(35,250,603)
Foreign currency transactions....................
260,966
-------
- ------
(34,989,637)
-------
- ------
Net loss on investments and foreign currencies.....
(2,428,540)
-------
- ------
Net decrease in Net Assets
Resulting from Operations.......................... $
(3,525,979)
-------
- ------
-------
- ------
</TABLE>
PRUDENTIAL GLOBAL GENESIS FUND, INC.
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended
November 30, 1996
May 31, 1995
--------------------
- ---------------
<S> <C>
<C>
Increase (Decrease)
in Net Assets
Operations
Net investment loss............. $ (1,097,439)
$ (638,889)
Net realized gain (loss) on
investments and foreign
currency transactions............ 32,561,097
(281,028)
Net change in unrealized
appreciation/depreciation of
investments and foreign
currencies....................... (34,989,637)
34,099,480
-------------
- -------------
Net increase (decrease) in net
assets resulting from operations (3,525,979)
33,179,563
-------------
- -------------
Net equalization debits (credits). --
(25,288)
-------------
- -------------
Dividends to shareholders in excess
of net investment income (Note 1)
Class A......................... --
(195,472)
Class B......................... --
(695,209)
Class C......................... --
(8,179)
-------------
- -------------
--
(898,860)
-------------
- -------------
Fund share transactions (Net of
share conversions) (Note 6)
Net proceeds from shares
subscribed...................... 77,713,306
333,985,435
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions.............. --
827,626
Cost of shares reacquired....... (94,037,791)
(360,913,268)
-------------
- -------------
Net decrease in net
assets from Fund share
transactions................... (16,324,485)
(26,100,207)
-------------
- -------------
Total increase (decrease)........ (19,850,464)
6,155,208
Net Assets
Beginning of period.............. 205,184,048
199,028,840
-------------
- -------------
End of period.................... $ 185,333,584
$ 205,184,048
-------------
- -------------
-------------
- -------------
</TABLE>
- ------------------------------------------------------------
- -------------------
See Notes to Financial Statements.
11
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL
GENESIS
(Unaudited) FUND, INC.
- ------------------------------------------------------------
- -------------------
Prudential Global Genesis Fund, Inc., (the "Fund"), is
registered under the
Investment Company Act of 1940 as a diversified, open-end
management investment
company. The Fund's investment objective is long-term growth
of capital which
it seeks to achieve by investing primarily in equity
securities of foreign and
domestic companies with market capitalizations of less than
U.S. $1 billion,
as measured at time of purchase.
- ------------------------------------------------------------
- ---
Note 1. Accounting Policies
The following is a summary of significant accounting
policies followed by the
Fund in the preparation of its financial statements.
Security Valuation: Securities traded on an exchange are
valued at the last
reported sales price on the primary exchange on which they
are traded.
Securities traded in the over-the-counter market (including
securities listed
on exchanges for which a last sales price is not available)
are valued at the
average of the last reported bid and asked prices.
Securities for which market
quotations are not readily available, including restricted
securities, will be
valued at fair value as determined in good faith according
to a pricing
procedure developed by the Investment Advisor under
procedures established
by and under the general supervision of the Fund's Board of
Directors.
Short-term securities which mature in more than 60 days are
valued at current
market quotations. Short-term securities which mature in 60
days or less are
valued at amortized cost which approximates market value.
In connection with transactions in repurchase agreements
with U.S. financial
institutions, it is the Fund's policy that its custodian or
designated
subcustodians, as the case may be under triparty repurchase
agreements,
take possession of the underlying collateral securities, the
value of which
exceeds the principal amount of the repurchase transaction
including accrued
interest. If the seller defaults and the value of the
collateral declines or
if bankruptcy proceedings are commenced with respect to the
seller of the
security, realization of the collateral by the Fund may be
delayed or limited.
Foreign Currency Translation: The books and records of the
Fund are maintained
in U.S. dollars. Foreign currency amounts are translated
into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and
liabilities--at
the daily closing rates of exchange.
(ii) purchases and sales of investment securities, income
and expenses--at the
rate of exchange prevailing on the respective dates of such
transactions.
Although the net assets of the Fund are presented using the
foreign exchange
rates and market values at the close of the fiscal year, the
Fund does not
isolate that portion of the results of operations arising as
a result of
changes in the foreign exchange rates from the fluctuations
arising from
changes in the market prices of securities held at the
fiscal year end.
Similarly, the Fund does not isolate the effect of changes
in foreign
exchange rates from the fluctuations arising from changes in
the market
prices of long-term portfolio securities sold during the
fiscal year.
Net realized gain on foreign currency transactions of
$1,957,349
represents net foreign exchange gains from disposition of
foreign
currencies, currency gains or losses realized between the
trade and
settlement dates on security transactions, and the
difference between
the amounts of dividends, interest and foreign taxes
recorded on the
Fund's books and the U.S. dollar equivalent amounts actually
received or
paid. Net unrealized currency gains and losses from valuing
foreign
currency denominated assets and liabilities (other than
investments)
at fiscal year end exchange rates are reflected as a
component of net
unrealized appreciation on foreign currencies.
Foreign security and currency transactions may involve
certain considerations
and risks not typically associated with those of domestic
origin as a result
of, among other factors, the possibility of political and
economic
instability and the level of governmental supervision and
the regulation
of foreign securities markets.
Forward Currency Contracts: A forward currency contract is
a commitment
to purchase or sell a foreign currency at a future date at a
negotiated
forward rate. The Fund enters into forward currency
contracts in order
to hedge its exposure to changes in foreign currency
exchange rates on
its foreign portfolio holdings or on specific receivables
and payables
denominated in a foreign currency. The contracts are valued
daily at
current exchange rates and any unrealized gain or loss is
included in
net unrealized appreciation or depreiciation on investments.
Gain or
loss is realized on the settlement date of the contract
equal to the
difference between the settlement value of the original and
renegotiated
forward contracts. This gain or loss, if any, is included in
net realized
gain (loss) on foreign currency transactions. Risks may
arise upon entering
into these contracts from the potential inability of the
counterparties to
meet the terms of their contracts.
Securities Transactions and Investment Income: Securities
transactions are
recorded on the trade date. Realized gains and losses from
investment and
currency transactions are calculated on the identified cost
basis. Dividend
income is recorded on the ex-dividend date and interest
income is recorded
on an accrual basis.
Net investment income (other than distribution fees) and
unrealized and
realized gains or losses are allocated daily to each class
of shares of
the Fund based upon the relative proportion of net assets of
each class
at the beginning of the day.
Equalization: Effective June 1, 1996,the Fund disountinued
the accounting
practice of equalization. Equalization is a practice whereby
a portion if
the proceeds from sales and costs of repurchases of capital
shares,
equivalent on
- ------------------------------------------------------------
- -----------------
12
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL
GENESIS
(Unaudited) FUND, INC.
- ------------------------------------------------------------
- -------------------
a per share basis to the amount of distributable net
investment income on the
date of the transaction, is credited or charged to
undistributed net investment
income. The balance of $25,288 of undistributed net
investment income at
May 31, 1996, resulting from eqalization was transferred to
paid-in capital
in excess of par.. Such reclassification has no effect on
net assets,
results of operations, or net asset value per share.
Taxes: It is the Fund's policy to continue to meet the
requirements of the
Internal Revenue Code applicable to regulated investment
companies and to
distribute all of its taxable income to shareholders.
Therefore, no federal
income tax provision is required.
Withholding taxes on foreign interest, dividends and
(realized and
unrealized) capital gains have been provided for in
accordance with the
Fund's understanding of the applicable country's tax rules
and rates. In
addition, certain countries impose taxes on capital gains
realized on the
sale of portfolio securities, and as such, taxes have been
accrued on the
unrealized gains on such securities.
Dividends and Distributions: The Fund expects to pay
dividends of net
investment income and distributions of net realized capital
gains, if any,
at least annually. Dividends and distributions are recorded
on the ex-dividend
date.
Income distributions and capital gain distributions are
determined in
accordance with income tax regulations which may differ from
generally
accepted accounting principles. These differences are
primarily due to
differing treatments of wash sales, passive investment
companies, and foreign
currencies' transactions.
Reclassification of Capital Accounts: The Fund accounts and
reports for
distributions to shareholders in accordance with the
American Institute of
Certified Public Accountants' Statement of position 93-2:
Determination,
Disclosure, and Financial Statement Presentation of Income,
Capital Gain,
and Return of Capital Distributions by Investment Companies.
The effect of
applying this statement was to increase undistributed net
investment income
by $1,957,349, and decrease accumulated net realized gain on
investments
and foreign currency transactions by $1,957,349 for the six
ended November
30, 1996. Net realized gains and net assets were not
affected by this change.
- ------------------------------------------------------------
- -
Note 2. Agreements
The Fund has a management agreement with Prudential Mutual
Fund Management
LLC ("PMF"). Pursuant to this agreement, PMF has
responsibility for all
investment advisory services and supervises the subadvisor's
performance of
such services. PMF has entered into a subadvisory agreement
with The
Prudential Investment Corporation ("PIC"); PIC furnishes
investment advisory
services in connection with the management of the Fund. PMF
pays for the
services of PIC, the cost of compensation of officers of the
Fund, occupancy
and certain clerical and bookkeeping costs of the Fund. The
Fund bears all
other costs and expenses.
The management fee paid PMF is computed daily and payable
monthly, at an
annual rate of 1% of the average daily net assets of the
Fund.
The Fund has distribution agreements with Prudential
Securities Incorporated
("PSI"), which acts as the distributor of the Class A, Class
B, Class C,
and Class Z shares of the Fund. The Fund compensates PSI for
distributing
and servicing the Fund's Class A, Class B and Class C
shares, pursuant to
plans of distribution, (the "Class A, B and C Plans")
regardless of expenses
actually incurred by them. The distribution fees are accrued
daily and payable
monthly. No distribution or service fees are paid to PSI as
distributor of the
Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund compensates
PSI for its
distribution related activities at an annual rate of up to
.30 of 1%, 1%
and 1%, of the average daily net assets of the Class A, B
and C shares,
respectively. Such expenses under the Plans were .25% of 1%,
1% and 1% of
the average daily net assets of the Class A, Class B and
Class C shares,
respectively, for the period six months ended November 30,
1996.
PSI has advised the Fund that it has received approximately
$26,100 in
front-end sales charges resulting from sales of Class A
shares for the
six months ended November 30, 1996. From these fees, PSI
paid such sales
charges to dealers, which in turn paid commissions to
salespersons and
incurred other distribution costs.
PSI has advised the Fund that for the six months ended
November 30, 1996,
it received approximately $236,000 and $900 in contingent
deferred sales
charges imposed upon redemptions by certain Class B and
Class C shareholders,
respectively.
- -------------------------------------------------------
Note 3. Other Transactions With Affiliates
Prudential Mutual Fund Services LLC. ("PMFS"), a wholly-
owned subsidiary
of PMF, serves as the Fund's transfer agent and during the
period ended
November 30, 1996, the Fund incurred fees of approximately
$251,000 for
the services of PMFS. As of November 30, 1996, approximately
$33,900 of
such fees were due to PMFS. Transfer agent fees and expenses
in the
Statement of Operations include certain out-of-pocket
expenses paid to
non-affiliates. For the six months ended November 30, 1996
PSI and/or
its foreign affiliates earned approximately $4,800 in broker
commissions
from portfolio transactions executed on behalf of the Fund.
- ------------------------------------------------------------
- ---------
13
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL
GENESIS
(Unaudited) FUND, INC.
- ------------------------------------------------------------
- -------------------
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than
short-term
investments, for the fiscal period ended November 30, 1996
aggregated
$128,818,340 and $132,065,111, respectively.
The federal income tax basis of the Fund's investments at
November 30, 1996
was $160,770,015 and accordingly, net unrealized
appreciation for federal
income tax purposes was $17,750,486 (gross unrealized
appreciation--$24,710,367;
gross unrealized depreciation--$6,959,881).
For federal income tax purposes, the Fund has a capital loss
carryforward as
of May 31, 1996 of approximately $2,070,300 of which
$1,125,300 expires in
2003 and $945,000 expires in 2004. Accordingly, no capital
gains distribution
is expected to be paid to shareholders until future net
gains have been
realized in excess of such carryforward.
For federal income tax purposes, the Fund will elect to
treat net capital
losses of approximately $1,374,700 and net currency losses
of approximately
$533,800 incurred in the seven month period ended May 31,
1996 as having
incurred in the current fiscal year.
At November 30, 1996 the Fund had outstanding forward
currency contracts,
both to purchase and sell foreign currencies, as follows:
<TABLE>
<CAPTION>
Value at
Settlement
Foreign Currency Date
Current
Purchase Contract Payable
Value Depreciation
- -------------------- ------------- -----
- ----- ------------
<S> <C> <C>
<C>
Duesche Mark,
Expiring 4/17/97 -
4/25/97 11,642,595
11,328,448 (314,147)
Japanese Yen,
Expiring 5/1/97 16,540,244
16,082,609 (457,635)
------------ ------
- ------ ----------
28,182,839
27,411,057 (771,782)
------------ ------
- ------ ----------
------------ ------
- ------ ----------
</TABLE>
<TABLE>
<CAPTION>
Value at
Settlement
Foreign Currency Date Current
Sale Contract Payable Value
Appreciation
- ------------------- ------------------ ----------
- -- --------------
<S> <C> <C>
<C>
Duesche Mark,
Expiring 4/17/97
4/25/97 31,020,000
30,551,133 468,867
French Franc
Expiring 4/12/97 4,284,574
4,204,339 80,235
Japanese Yen,
Expiring 4/21/97
5/19/97 30,110,000
29,381,447 728,553
------------ ---------
- --- ----------
65,414,574
64,136,919 1,277,655
------------ ---------
- --- ----------
------------ ---------
- --- ----------
</TABLE>
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered investment
companies,
transfers uninvested cash balances into a single joint
account, the daily
aggregate balance of which is invested in one or more
repurchase agreements
collateralized by U.S. Treasury or federal agency
obligations. At November
30, 1996, the Fund had a 0.165% undivided interest in the
repurchase
agreements in the joint account. The undivided interest for
the Fund
represented $3,124,000 in principal amount. As of such date,
each repurchase
agreement in the joint account and the value of the
collateral therefore were
as follows:
Bear, Stearns & Co., 5.68%, in the principal amount of
$280,000,000,
repurchase price $280,132,533, due 12/2/96. The value of the
collateral
including accrued interest is $285,853,687.
CS First Boston Corporation, 5.68%, in the principal amount
of $280,000,000,
repurchase price $280,132,533, due 12/2/96. The value of the
collateral
including accrued interest is $290,562,688.
J.P. Morgan Securities, Inc., 5.65%, in the principal amount
of $34,809,000,
repurchase price $34,825,389, due 12/2/96. The value of the
collateral
including accrued interest is $35,526,121.
Smith Barney, Inc., 5.68%, in the principal amount of
$280,000,000, repurchase
price $280,132,533, due 12/2/96. The value of the collateral
including accrued
interest is $286,599,817.
- ------------------------------------------------------------
- ----------
Note 6. Capital
The Fund offers Class A, Class B, Class C, and Class Z
shares. Class A shares
are sold with a front-end sales charge of up to 5%. Class B
shares are sold
with a contingent deferred sales charge which declines from
5% to zero
depending on the period of time the shares are held. Class C
shares are
sold with a contingent deferred sales charge of 1% during
the first year.
Class B shares will automatically convert to Class A shares
on a quarterly
basis approximately seven years after purchase. Effective
September 13, 1996
the Fund commenced offering Class Z Shares. Class Z shares
are not subject to
any sales or redemption charge and are offered exclusively
for sale to a
limited group of investors.
The Fund has authorized 500 million shares of common stock
at $.01 par
value per share equally divided into four classes,
designated Class A,
Class B, Class C, and Class Z common stock.
- ------------------------------------------------------------
- ---------
14
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL
GENESIS
(Unaudited) FUND, INC.
- ------------------------------------------------------------
- -------------------
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares
Amount
- ---------- ----------
- --------
<S> <C>
<C>
Period ended November 30, 1996:
Shares sold.................... 3,331,728
$ 69,299,400
Shares reacquired.............. (3,542,645)
(73,855,253)
---------------
- -------------
Net decrease in shares outstanding
before conversion............. (210,917)
(4,555,853)
Shares issued upon conversion
from Class B.................. 207,364
4,368,329
---------------
- -------------
Net decrease in shares outstanding (3,553)
$ (187,524)
---------------
- -------------
---------------
- -------------
Year ended May 31, 1996:
Shares sold..................... 8,715,437
$ 171,119,515
Shares issued in reinvestment of
dividends and distributions.... 9,315
180,140
Shares reacquired............... (9,127,818)
(179,580,690)
---------------
- -------------
Net decrease in shares outstanding
before conversion.............. (403,066)
$ (8,281,035)
Shares issued upon conversion
from Class B................... 204,786
4,094,014
---------------
- -------------
Net decrease in shares outstanding (198,280)
$ (4,187,021)
---------------
- -------------
---------------
- -------------
<CAPTION>
Class B
- ---------
Period ended November 30, 1996:
Shares sold.................... 396,589
$ 7,940,640
Shares reacquired.............. (974,457)
(19,425,453)
---------------
- -------------
Net decrease in shares outstanding
before conversion............. (577,868)
(11,484,813)
Shares reacquired upon conversion
into Class A................... (216,196)
(4,368,329)
---------------
- -------------
Net decrease in shares
outstanding.................... (794,064)
$ (15,853,142)
---------------
- -------------
---------------
- -------------
Year ended May 31, 1996:
Shares sold..................... 8,445,077
$ 161,457,654
Shares issued in reinvestment of
dividends and distributions.... 34,065
639,398
Shares reacquired............... (9,438,151)
(180,608,303)
---------------
- -------------
Net decrease in shares outstanding
before conversion.............. (959,009)
(18,511,251)
Shares reacquired upon conversion
into Class A................... (212,363)
(4,094,014)
---------------
- -------------
Net decrease in shares outstanding (1,171,372)
$ (22,605,265)
---------------
- -------------
---------------
- -------------
</TABLE>
<TABLE>
<CAPTION>
Class C Shares
Amount
- ------------ ----------
- ------------
<S> <C>
<C>
Period ended November 30, 1996:
Shares sold................... 22,455
$ 451,501
Shares reacquired............. (36,747)
(737,056)
---------------
- -------------
Net decrease in shares outstanding (14,292)
(285,555)
---------------
- -------------
Year ended May 31, 1996:
Shares sold.................... 72,739
1,408,266
Shares issued in reinvestment of dividends
and distributions............. 431
8,088
Shares reacquired.............. (37,424)
(724,275)
---------------
- -------------
Net increase in shares outstanding 35,746
$ 692,079
---------------
- -------------
---------------
- -------------
<CAPTION>
Class Z
- ----------
September 13, 1996* through
November 30, 1996:
Shares sold................... 1,069
$ 21,765
Shares reacquired............. (981)
(20,029)
---------------
- -------------
Net increase in shares outstanding 88
$ 1,736
---------------
- -------------
---------------
- -------------
</TABLE>
* Commencement of offering of Class Z shares.
____________________________________________________________
_______
Note 7. Distributions
On December 10, 1996, the Board of Directors of the Fund
declared a short-term
capital gain distribution of $0.12 per share and a long-term
capital gain
distribution of $1.63 per share for Class A, B, C, and Z
shares, respectively,
payable on December 19, 1996 to shareholders of record on
December 16, 1996.
- ------------------------------------------------------------
- -------------------
15
<PAGE>
Financial Highlights (Unaudited) PRUDENTIAL GLOBAL
GENESIS FUND, INC.
- ------------------------------------------------------------
- ---------------
<TABLE>
<CAPTION>
Class A
-----------
- ------------------------------------------------------------
- ----
Six
Months
Ended
Year Ended May 31,
November
30,---------------------------------------------------------
- -----
1996
1996 1995(c) 1994(c) 1993(c) 1992(c)
---------
- --------- ---------- --------- ---------- ----------
<S> <C>
<C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of period..... $ 21.74
$ 18.44 $ 18.75 $ 15.34 $ 12.62 $ 11.95
-----------
- ---------- ----------- -------- -------- ---------
- --
Income from investment
operations
Net investment income (loss)............. (.06)
.05(b) -- (.03)(b) .10(b)
.02(b)
Net realized and unrealized
gain (loss) on investment and
foreign currency transactions........... (.22)
3.34 (.21) 3.83 2.62 .65
----------
- ---------- ----------- -------- -------- ------
- -----
Total from investment operations........ (.28)
3.39 (.21) 3.80 2.72 .67
-----------
- ---------- ----------- -------- -------- ------
- -----
Less distributions
Dividends from net investment income..... --
- -- -- (.15) -- --
Dividends in excess of net investment income --
(.09) (.08) -- -- --
Distributions from net realized gains on investment
and foreign currency transactions....... --
- -- (.02) (.24) -- --
-----------
- ---------- ----------- -------- -------- ------
- -----
Total distributions..................... --
(.09) (.10) (.39) -- --
Net asset value, end of period........... $ 21.46
$ 21.74 $ 18.44 $ 18.75 $ 15.34 $
12.62
-----------
- ---------- ----------- -------- -------- ------
- -----
-----------
- ---------- ----------- -------- -------- ------
- -----
TOTAL RETURN(d):......................... (1.29)%
18.41% (0.95)% 25.09% 21.55%
5.61%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000).......... $ 46,937
$ 47,617 $ 44,051 $ 29,221 $ 3,435 $
3,829
Average net assets (000)................. $ 47,144
$ 45,070 $ 32,430 $ 16,909 $ 3,106 $
3,771
Ratios to average net assets:
Expenses, including distribution fees...
1.81%(a) 1.79%(b) 1.42%(b) 1.48%(b)
1.49%(b) 1.50%(b)
Expenses, excluding distribution fees...
1.56%(a) 1.54%(b) 1.17%(b) 1.25%(b)
1.29%(b) 1.32%(b)
Net investment income (loss)............
(.60)%(a) .26%(b) .02%(b) (.17)%(b)
.79%(b) .19%(b)
For Class A, B, C and Z shares:
Portfolio turnover rate.................. 131%
44% 64% 31% 67% 57%
Average commission rate per share........ $0.0953
$0.0090 N/A N/A N/A
N/A
</TABLE>
- -----------------
(a) Annualized.
(b) Net of expense subsidies and/or fee waivers.
(c) Calculated based upon average shares outstanding, by
class.
(d) Total return does not consider the effects of sales
loads. Total return is
calculated assuming a purchase of shares on the first day
and a sale on the
last day of each period reported and includes reinvestment
of dividends and
distributions. Total returns for periods of less than a full
year are no
annualized.
- ------------------------------------------------------------
- ------------------
16 See Notes to
Financial Statements
<PAGE>
Financial Highlights (Unaudited) PRUDENTIAL GLOBAL
GENESIS FUND, INC.
- ------------------------------------------------------------
- ---------------
<TABLE>
<CAPTION>
Class B
--------------
- ------------------------------------------------------------
- ---------
Six Months
Ended
Year Ended May 31,
November
30,---------------------------------------------------------
- -----------
1996
1996 1995(c) 1994(c) 1993(c) 1992(c)
---------
- ---------- ---------- --------- ---------- -------
- ---
<S> <C>
<C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of period..... $ 20.87
$ 17.84 $ 18.22 $ 14.93 $ 12.38 $ 11.82
Income from investment
operations
Net investment loss...................... (.17)
(.09)(b) (.13)(b) (.16)(b) --
(.07)(b)
Net realized and unrealized
gain (loss) on investment and
foreign currency transactions........... (.17)
3.21 (.19) 3.74 2.55 .63
-----------
- ---------- ----------- -------- -------- --------
- ---
Total from investment operations....... (.34)
3.12 (.32) 3.58 2.55 .56
-----------
- ---------- ----------- -------- -------- --------
- ---
Less distributions
Dividends from net investment income..... --
- -- -- (.05) -- --
Dividends in excess of net investment income --
(.09) (.03) -- -- --
Distributions from net realized gains on investment
and foreign currency transactions....... --
- -- (.03) (.24) -- --
-----------
- ---------- ----------- -------- -------- --------
- ---
Total distributions...................... --
(.09) (.06) (.29) -- --
-----------
- ---------- ----------- -------- -------- ---------
- --
-----------
- ---------- ----------- -------- -------- --------
- ---
Net asset value, end of period............ $ 20.53
$ 20.87 $ 17.84 $ 18.22 $ 14.93 $
12.38
TOTAL RETURN(d):.......................... (1.63)%
17.51% (1.73)% 24.16% 20.60% 4.74%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........... $ 136,450
$ 155,292 $ 153,670 $ 174,659 $ 36,136 $
35,644
Average net assets (000).................. $ 142,094
$ 154,566 $ 173,591 $ 102,451 $ 31,561 $
37,236
Ratios to average net assets:
Expenses, including distribution fees.... 2.56%(a)
2.54%(b) 2.17%(b) 2.25%(b) 2.29%(b)
2.30%(b)
Expenses, excluding distribution fees.... 1.56%(a)
1.54%(b) 1.17%(b) 1.25%(b) 1.29%(b)
1.30%(b)
Net investment loss......................
(1.32)%(a) (.48)%(b) (.77)%(b) (.91)%(b)
(.01)%(b) (.57)%(b)
</TABLE>
- ------------------
(a) Annualized.
(b) Net of expense subsidies and/or fee waivers.
(c) Calculated based upon average shares outstanding, by
class.
(d) Total return does not consider the effects of sales
loads. Total return is
calculated assuming a purchase of shares on the first day
and a sale on the
last day of each period reported and includes reinvestment
of dividends and
distributions. Total returns for periods of less than a full
year are not
annualized.
- ------------------------------------------------------------
- -------------------
See Notes to Financial Statements.
17
<PAGE>
Financial Highlights (Unaudited) PRUDENTIAL GLOBAL
GENESIS FUND, INC.
- ------------------------------------------------------------
- ---------------
<TABLE>
<CAPTION>
Class C
Class Z
--------------------
- ------------------------ ----------------
August 1, September 13,
Six Months
Year 1994 (e) 1996 (f)
Ended
Ended Through Through
November 30,
May 31, May 31, November 30,
1996
1996 1995(c) 1996
------------
- ---------- ---------- --------------
<S> <C>
<C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of period $ 20.87
$ 17.84 $ 18.44 $ 20.46
------------
- ---------- ---------- --------------
Income from investment
operations
Net investment loss................ (.15)
(.08)(b) (.12)(b) (.06)
Net realized and unrealized
gain (loss) on investment and
foreign currency transactions..... (.19)
3.20 (.44) 1.15
------------
- ---------- ---------- --------------
Total from investment operations.. (.34)
3.12 (.56) 1.09
------------
- ---------- ---------- --------------
Less distributions
Dividends from net investment income --
- -- -- --
Dividends in excess of net investment
income............................. --
(.09) (.03) --
Distributions from net realized gains
on investment
and foreign currency transactions.... --
- -- (.01) --
------------
- ---------- ---------- --------------
Total distributions.................. --
(.09) (.04) --
------------
- ---------- ---------- --------------
Net asset value, end of period........ $ 20.53
$ 20.87 $ 17.84 $ 21.55
------------
- ---------- ---------- --------------
------------
- ---------- ---------- --------------
TOTAL RETURN(d):...................... (1.63)%
17.51% (2.90)% 5.33%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)....... $ 1,945
$ 2,275 $ 1,307 $ 2
Average net assets (000)............. $ 2,061
$ 1,809 $ 862 $ 1
Ratios to average net assets:
Expenses, including distribution fees 2.56%(a)
2.54%(b) 2.27%(a)(b) 1.74%(a)
Expenses, excluding distribution fees 1.56%(a)
1.54%(b) 1.27%(a)(b) 1.74%(a)
Net investment loss.................. (1.30)%(a)
(.44)%(b) (.90)%(a)(b) (1.74)%(a)
</TABLE>
- -------------------
(a) Annualized.
(b) Net of expense subsidies and/or fee waivers.
(c) Calculated based upon average shares outstanding, by
class.
(d) Total return does not consider the effects of sales
loads. Total return
is calculated assuming a purchase of shares on the first
day and a sale on
the last day of each period reported and includes
reinvestment of dividends
and distributions. Total returns for periods of less than a
full year are not
annualized.
(e) Commencement of offering of Class C shares.
(f) Commencement of offering of Class Z shares.
- ------------------------------------------------------------
- -------------------
18 See Notes to
Financial Statements.
<PAGE>
Supplemental Proxy Information PRUDENTIAL GLOBAL
GENESIS FUND, INC.
- ------------------------------------------------------------
- ------------------
The Annual Meeting of Shareholders of the Prudential Global
Genesis Fund,
Inc. (the "Fund") was held on Wednesday, October 30, 1996 at
the offices of
Prudential Securities Incorporated, One Seaport Plaza, New
York, New York.
The meeting was held for the following purposes:
(1) To elect Directors as follows: Edward D. Beach, Stephen
C. Eyre,
Delayne Dedrick Gold, Robert F. Gunia, Don G. Hoff, Robert
E. LaBlanc,
Mendel A. Melzer, Richard A. Redeker, Robin B. Smith, Stepen
Stoneburn,
and Nancy H. Teeters.
(2) To amend the Fund's fundamental investment resriction
relating to
securities lending.
(3) To ratify the selection of Price Waterhouse LLP as
independent
accountants for the fiscal year ending May 31, 1997.
The results of the proxy solicitation on the above matters
were as follows:
<TABLE>
<CAPTION>
Director/Matter Votes
for Votes against Abstentions
-------------------- ------
- ----- --------------- ---------------
<S> <C>
<C> <C>
(1) Edward D. Beach
4,577,047 -- 241,238
Stephen C. Eyre
4,579,566 -- 238,719
Delayne Gold
4,587,953 -- 230,332
Robert Gunia
4,592,221 -- 226,064
Don Hoff
4,591,294 -- 226,991
Robert E. LaBlanc
4,592,307 -- 225,978
Mendel Melzer
4,584,819 -- 233,466
Richard Redeker
4,587,757 -- 230,528
Robin Smith
4,590,598 -- 227,687
Stephen Stoneburn
4,590,638 -- 227,647
Nancy Teeters
4,585,896 -- 232,389
(2) Investment Restrictions-securities lending
3,236,063 223,182 272,364
(3) Independent Auditors
4,527,806 60,060 230,419
</TABLE>
- ------------------------------------------------------------
- -------------------
19
<PAGE>
Getting The Most
From Your Prudential
Mutual Fund.
- ------------------------------------------------------------
- ---------
Change Your Mind.
You can exchange your shares in most Prudential Mutual Funds
for shares in
most other Prudential Mutual Funds, without charges. This
may be most helpful
if your investment needs change.
- ------------------------------------------------------------
- -----------------
Reinvest Dividends Free Of Charge.
Reinvest your dividends and/or capital gains distributions
automatically
- -- without charge.
- ------------------------------------------------------------
- ------------------
Invest For Retirement.
There is no minimum investment for an IRA. Plus, you defer
taxes on your
investment earnings by investing in an IRA.
If you'd like, you can contribute up to $2,000 a year in an
IRA. If you are
married, you and your spouse (if not working outside the
home) can contribute
up to $2,250 a year. (Withdrawals are taxed as ordinary
income and may be
subject to a 10% penalty prior to age 59 1/2.)
- ------------------------------------------------------------
- ---------------
Change Your Job.
You can take your pension with you. Use a rollover IRA to
manage your
company-sponsored retirement plan while retaining the
special tax-deferred
advantages.
- ------------------------------------------------------------
- --------------
Invest In Your Children.
There's no fee to open a custodial account for a child's
education or other
needs.
- ------------------------------------------------------------
- ------------------
Take Income.
Would you like to receive monthly or quarterly checks in any
amount from your
fund account? Just let us know. We'll take care of it. Of
course, there are
minimum amounts. And shares redeemed may be subject to tax,
and Class B and
C shares may be subject to contingent deferred sales
charges. We'll gladly
answer your questions.
- ------------------------------------------------------------
- -----------------
Keep Informed.
We want to keep you up-to-date. Of course, you receive
account activity
statements every quarter. But you also receive annual and
semi-annual fund
reports, as well as other important updates on events that
affect your
investments, including tax information.
This material is only authorized for distribution when
preceded or
accompanied by a current prospectus. Read the prospectus
carefully before
you invest or send money.
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Directors
Edward D. Beach
Stephen C. Eyre
Delayne Dedrick Gold
Robert F. Gunia
Don G. Hoff
Robert E. LaBlanc
Mendel A. Melzer
Richard A. Redeker
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Officers
Richard A. Redeker, President
David W. Drasnin, Vice President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Marguerite E.H. Morrison, Assistant Secretary
Manager
Prudential Mutual Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributor
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906
Independent Auditors
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, IL 60610-4795
The views expressed in this report and information about the
Fund's portfolio
holdings are for the period covered by this report and are
subject to change
thereafter.
The accompanying financial statements as of November 30,
1996 were not audited
and, accordingly, no opinion is expressed on them.
This report is not authorized for distribution to
prospective investors unless
preceded or accompanied by a current prospectus.
<PAGE>
(LOGO)
BULK RATE
U.S. POSTAGE
Prudential Mutual Funds
PAID
Gateway Center Three
Permit 6807
100 Mulberry Street
New York, NY
Newark, NJ 07102-4077
(800) 225-1852
744333105
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